Page:Amicus brief - Stoneridge v Scientific-Atlanta - Chamber of Commerce of the United States of America.pdf/31

 22 2. § 20(e): In the Private Securities Litigation Reform Act of 1995 (PSLRA), Congress rejected proposals to overrule Central Bank and expand the scope of private civil liability under § 10(b) to secondary actors. Instead, in enacting § 20(e) of the 1934 Act, 15 U.S.C. § 78t(e), Congress expressly provided that only in actions brought by the SEC, “any person who knowingly provides substantial assistance to another person in violation of a provision of this chapter, or of any rule or regulation issued under this chapter, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.” Thus, Congress gave the SEC, but not private plaintiffs, an express claim for conduct (“substantial assistance”) against defendants who had no duty to disclose. This congressional decision has only one of two meanings. Either Congress chose to ratify the Central Bank holding, supra, at 9-11, that private plaintiffs could not sue defendants under § 10(b) for conduct when those defendants had no duty to disclose. Or, as petitioner and its amici would have it, Congress believed that what was called “aiding-and-abetting” conduct before Central Bank would be called “primary” conduct thereafter, so that there was no need to overrule Central Bank for private plaintiffs. The latter view is nonsensical and contradicts the PSLRA’s drafting history. If the scope of primary liability under § 10(b) were as broad as petitioner contends, then § 20(e) would be at best surplusage. The SEC would always sue for “scheme” liability under § 10(b) because § 20(e) has additional requirements of “knowingly providing substantial assistance.” Moreover, as the Senate Report states, Congress made a deliberate policy decision to deny private plaintiffs the authority to bring suits for conduct against secondary actors who had no duty to disclose because “amending the 1934 Act broker-dealer registrations. See 15 U.S.C. §§ 78o(b)(4)(A), 78u-2(a)(3), 78ff(a). None of these provisions creates a private right of action.